1. (a) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Commission--The General Services Commission.
   2. (2) Consulting service--A study conducted for a state agency or advice provided to a state agency under a contract that does not involve the traditional relationship of employer and employee. The term does not include a routine service that is necessary to the functioning of a state agency's programs.
   3. (3) Credit card--A credit card issued to an officer or employee of a state agency for the sole purpose of allowing the officer or employee to purchase goods or services for the agency.
   4. (4) Executive director--The individual who is the chief administrative officer of a state agency. The term excludes a member of a governing body.

   5. (5) Executive head--

      1. (A) the elected or appointed state official who is authorized by law to administer a state agency if the agency is not headed by a governing body; or
      2. (B) the executive director of a state agency if the agency is headed by a governing body.

   6. (6) State agency--

      1. (A) a board, commission, department, or other agency in the executive branch of state government that is created by the constitution or a statute of this state, including an institution of higher education as defined by the Education Code, §61.003, other than a public junior college;
      2. (B) the legislature or a legislative agency; or
      3. (C) the Supreme Court of Texas, the Court of Criminal Appeals of Texas, a court of appeals, or a state judicial agency.
2. (b) Applicability of this section. Except as provided in subsection (c) of this section, this section applies to a state agency's use of a credit card regardless of the type of funds the agency uses to pay the credit card issuer.

3. (c) Exemptions.

   1. (1) This section does not apply to a state agency if a law other than the Government Code, §403.023, specifically authorizes, requires, prohibits, or otherwise regulates the agency's use of a credit card.
   2. (2) This section does not apply to the extent its application would affect a contract in which a state agency is a party. This paragraph applies only if the contract was in effect on September 1, 1993.
   3. (3) This section does not apply to the extent its application would violate a constitutional prohibition against a law that impairs a contractual obligation.
   4. (4) This section does not apply to the extent necessary to avoid an irreconcilable conflict with a federal law or regulation.
   5. (5) This section does not apply to the use of a credit card to pay for travel expenses incurred by a state officer or employee while conducting official state business.
4. (d) Effect of noncompliance with this section. The comptroller may suspend or terminate a state agency's authority to use credit cards if the comptroller determines that the agency or an officer or employee of the agency has violated this section.

5. (e) Procurement of credit card services by the commission.

   1. (1) The commission may contract with a credit card issuer on behalf of state agencies.
   2. (2) A state agency may not use a credit card to pay for a purchase unless the credit card was issued under a contract between the commission and the credit card issuer.
   3. (3) A state agency may begin using a credit card to pay for purchases only after the agency has complied with the commission's procedural requirements.
6. (f) Adoption of procedures by state agencies. A state agency shall adopt reasonable procedures governing the issuance, security, and use of credit cards by the agency's officers and employees. Upon request, the agency shall make the procedures available to the comptroller for review.

7. (g) Prohibited uses of credit cards. A state agency may not use a credit card and may not reimburse an officer or employee for the use of a credit card for:

   1. (1) a purchase of a personal nature or any other purchase not connected with official state business;
   2. (2) a cash advance;
   3. (3) a purchase of a consulting service;
   4. (4) a purchase of goods or services that may not be purchased without the prior approval of another state agency;
   5. (5) a purchase that the comptroller audits before payment; or
   6. (6) a purchase from a vendor if a payment to it would be prohibited by the Government Code, §403.055 or §481.0841, the Education Code, §57.48, or the Human Resources Code, §76.0041.
8. (h) Applicability of purchasing requirements. The use of a credit card to pay for a purchase does not automatically exempt a state agency or its officers and employees from the purchasing requirements of state law or the commission.
9. (i) Payments to credit card issuers. A state agency shall pay a credit card issuer through an electronic funds transfer.
10. (j) Refunds. A state agency may not accept a cash refund for a purchase if the agency paid for the purchase with a credit card.
11. (k) Lost or stolen credit cards. The state employee that had custody of a credit card before it was lost or stolen shall report the loss or theft to the credit card issuer according to its instructions.
12. (l) Disputed charges. If a credit card issuer sends an invoice that a state agency believes has an incorrect charge, then the agency shall report the error to the issuer. The agency must report the error according to the issuer's deadline, instructions, and other requirements.
13. (m) Taxes. A state agency or a state employee shall properly claim an available exemption from paying a state or federal tax that is assessed on a purchase of goods or services by credit card.

14. (n) Responsibilities and notification of state employees.

    1. (1) A state employee shall ensure that the employee's purchases with a credit card comply with applicable state law and this section.
    2. (2) The executive head of a state agency is responsible for notifying the agency's employees about the requirements of this section.
15. (o) Fiscal year determination. The fiscal year that must be charged for a purchase is not affected by the paying state agency's use of a credit card to make the purchase. For example, if a state agency purchases a service with a credit card, then the payment to the credit card issuer for the service must be charged to the fiscal year in which the service was rendered.
16. (p) Prohibition against excess obligations. A state agency that uses a credit card to pay for a purchase should be careful not to violate any provision in the General Appropriations Act about the incurrence of excess obligations.

17. (q) Purchase document and receipt requirements.

    1. (1) A purchase document that a state agency submits to Uniform Statewide Accounting System (USAS) for a payment to a credit card issuer must comply with the comptroller's general requirements for the submission of those documents. In addition, the document must:

       1. (A) specify the complete name and payee identification number of:

          1. (i) the credit card issuer if a summary expenditure object code is used; or
          2. (ii) the vendor from which the purchase was made if a summary expenditure object code is not used;
       2. (B) provide the transaction charge and the appropriate payee number on the detail lines;
       3. (C) provide the payee number and name of the credit card issuer on the address line; and
       4. (D) contain any other information the comptroller deems necessary.
    2. (2) A state agency shall keep in its files the receipts that a vendor issues to the agency for a purchase by credit card. The receipts must contain a description of the goods or services purchased that is sufficient to support the expenditure object code used by the agency. The agency shall make the receipts available to the comptroller upon request.

Source Note:The provisions of this §5.57 adopted to be effective November 15, 1995, 20 TexReg 9190.